Crypto Academy Season 2 Week 1 Homework Post for (yousafharoonkhan) - Decentralized and Centralized system , Advantages & Disadvantages , Which one is best for business?

in SteemitCryptoAcademy2 months ago (edited)


This is Yarhassan. I hope you are doing well. This is my homework post for Crypto Academy Season 2 Week 1 Homework Post for @yousafharoonkhan.

ecentralized and Centralized system.jpg

Question no 1 :

Write the definition of Decentralization and Centralization in your own words. Explain these two systems in your own words.


According to me organizational setup in which the authority to make important decisions is retained by managers at the top of the ranking is called a Centralized system or centralization .

In other words :

the term centrilization means concentration of authority at the top of the administrive system . on the one hand and on the other hand ,
decentralization means dispersal of authority among the lower levels of the adminitrative .



An organization setup in which the authority to make the important decisions about organizational resurces and to iniate new projects is delegated to manageres at allt he levels of hierarchy .

In blockchain, decentralization refers to the transfer of management and decision-making from a centralized entity to a distributed network. suburbanized networks attempt to scale back the amount of trust that participants should place in each other, and deter their ability to exert authority or management over each other in ways in which degrade the practicality of the network.


Question no 2 :

Explain in your own words the difference between decentralization and centralization system Or Compare both in own words.

Difference between decentralization and centralization system:-



It refers to concentration of power or authority at higher level only

Authority at different levels:

Top management retains maximum authority. The authority with middle and lower management is very low.


It is suitable for small scale and small size organisations

Freedom of actions:

we have less freedom of action .



It refers to every distribution of powers and authority at every level of management.

Authority at different levels:

The authority is systematically divided at every level.


It is suitable for large scale organisations.

Freedom of actions:

we have more freedom of actions .

Question no 3 :

Write five Advantages and five Disadvantages of decentralized and centralized system.

Advantages of Centralization:-

1)A firm's or undertaking's management may choose to use a centralised decision-making model because of the following advantages;

Standardization - Since policies and procedures are structured, centralised processes make coordination easier. In a structured procedure, the actions are all the same.

2)Facilitates integration - In a structured model, common systems help coordinate the activities of all a company's departments. This simplifies the method of achieving shared goals.

3)Quality decisions - The senior management team is comprised of seasoned professionals with a strong understanding of the company's objectives. They make mature choices that are in the best interests of the business as a whole.

4)Simplicity - In a centralised management model, a firm's power structure is easier to comprehend. The organization's staff is clear on who has the authority to make decisions.

5)Structured procedures and effective governance result in improved work in a centralised organisation. Each unit has a leader who oversees the results and ensures that they are consistent.

Disadvantages of Centralization:-

1)In Administration Up to a point and in some situations, centralization is beneficial. Beyond that, a centralised model begins to stifle the company's growth by making day-to-day operations difficult.

2)Overburdening upper-level management - As top management is responsible for overseeing all of the company's policies and procedures, they are left with little time to focus on more critical functions that would help the company as a whole.
Unbalanced organisational structure - When the top level of a company is overburdened with positions while the lower levels are understaffed, the company becomes unbalanced.

3)Work is delayed - Since all decision-making occurs at the head office, work in passing documents to and from the headquarters is postponed. If the documents are not returned on time, the corporation will lose operating hours, resulting in a financial loss.

4)Individual initiative is stifled - Individual initiative is stifled because the whole enterprise revolves around top management. In such a situation, an organization's second line of command cannot expand.

5)Dictatorial governance - In a centralised management model, the leadership is very hierarchical. Employees are just following and applying the top management's orders. Since top management is just leading and not executing, there is a gap between workers and top management.As a result, top management is perplexed when workers have difficulty following instructions correctly.

Advantages of Decentralization:-

1)Decentralization is the most efficient solution during an emergency. If revenues are decreasing, for example, repurposing capital, cutting prices, ousting a rival, and so on. Decentralization relieves administrators of their responsibilities, and no one individual is kept accountable for anything.

2)Job coordination made simple - Decentralization makes scheduling work and keeping all tasks on track a breeze. Since the decision-making power is closer to the workers, decisions can be taken more quickly. These choices are often wiser and more precise.

3)Decentralization allows routine decisions to be delegated to middle and supervisory management, which relieves chief executives of the responsibility of making them. The CEOs will be able to focus more on essential business objectives such as product diversification, the launch of new production lines, and so on.

4)Increased community benefits - Decentralization can result in a better social net product, which is distinct from the company's benefit. More opportunities for active individual interaction, freedom of action, and a lower social hierarchical structure may be some of the general benefits.

5)Decentralization is considered useless if there is a shortage of qualified and educated personnel.

Disadvantages of Decentralization:-

1)Decentralization has its own collection of difficulties and limitations, and it may not be appropriate in all situations. The following are some of the disadvantages of decentralisation:

2)Decentralization can be impractical due to external factors such as company-wide strikes. Administrative costs have increased as a result of the need for highly paying professional administrators at all levels.

3)There is a lack of consistency across departments because each manager creates his or her own policies based on his or her knowledge and abilities.

4)For small businesses, departmentalization is pointless since the costs of running the business outweigh the advantages.

5)There's a danger that each department becomes self-centered and loses sight of the company's overall goals.

Question no 4 :

Which one is better for Business/trading and why?
It all depends upon the situation . According me decentralized system is the way to go for business/trading.The benefit of decentralized system is that the scalibity is high , reliebilty is also high and the response time is quick . both the systems centralized and decentrazlized are good but ill choose decentralized for trading or business purpose .

Question no 5 :

How do you know if a blockchain is decentralized or not? You can describe any method, but in your own words.

So to know if the blockchain is centralized or not . I will be using a website called tronscan .

when going to this website i used my trx address .

Screenshot 2021-04-17 235740.jpg

after that i entered a bitcoin address . the page came up with these .

Screenshot 2021-04-18 000645.jpg

then i went to the contract page and some encypted code appeared from where i came to know that it was decentralized

Screenshot 2021-04-18 000627.jpg

Conclusion :-

so i conclude the post with that , it was amazing to learn such an important topic of blockchain which we were missing . the professor explained it very well . It was my pleasure to learn from him and gain knowledge . we came to know about the importance of centralized and decentralized system in blockchain/business and trade .


First respected student Thank you very much for taking participate in Steemit Crypto Academy Season 2, Week 1 course class..

I have read your assignment very satisfactorily

Suggestions: Any images used should be from copyright-free sources and fully referenced

  • in last question you did not explain about coding area

Thank you very much for attending the classs

Grade : 7